Sounds like the subframe bushing(s)is shot. You will get a clunk when you upshift and release the clutch and also when you let off of the gas. There are two of these, one on each side in the rear where the subframe and the passenger cabin mate. They are about the size of your fist and require a special BMW tool to extract and replace. The car needs to go on a lift for accesibility. Take it to your local shop.

I have a derivability question. 80% of the time, when I let up on the gas, I feel a harsh jolt and can't tell where it coming from. I have replaced tran. mounts (5 speed), so I can rule those out. It doesn't do it all the time, only when I let up on the gas suddenly. Almost as if there's too much slop in the drive line. Had by local mech. check it out and he couldn't find anything wrong or worn in the drive train. Any suggestions?
Richard V
'92 535i 5 speed 96k